(By Balaseshan) Global insurance broker Aon Plc (NYSE: AON) reported a 10% increase in quarterly earnings driven by a higher rate of organic revenue growth across each segment, and strong free cash flow growth. Results exceeded Street's expectations.
Profit from continuing operations for the fourth quarter were $305 million or $0.95 per share, up from $277 million or $0.84 per share last year. Earnings per share (EPS) from continuing operations rose to $1.27 from $1.16.
Total revenue increased 4% to $3.12 billion, driven by a 4% rise in organic revenue, partially offset by a 50% drop in investment income due to lower average interest rates.
Analysts, on average, polled by Thomson Reuters had expected a profit of $1.26 per share on revenue of $3.07 billion for the fourth quarter.
Risk solutions revenue rose 2% to $2.1 billion, due to 3% organic growth in commissions and fees partially offset by a 50% drop in investment income. Retail Brokerage organic revenue increased 3% reflecting revenue growth in both the Americas and International businesses.
HR solutions revenue increased 7% to $1.1 billion, due to 6% organic growth in commissions and fees and a 1% favorable impact from acquisitions, net of divestitures.
Organic revenue in Consulting Services grew 8% driven primarily by solid growth across all businesses. Organic revenue in Outsourcing rose 6% due primarily to strong growth in healthcare exchanges and net new client wins and demand for discretionary services in HR BPO.
"As we look ahead to 2013, we have positioned our industry-leading platform for solid long-term growth, improved operational performance, strong free cash flow growth and effective capital management," said Greg Case, president and chief executive officer.
AON closed Thursday's regular session up 0.03% at $57.74. The stock has been trading between $45.04 and $58.43 for the past 52 weeks.